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The Semiconductor Industry Association (SIA) released the following statement from President and CEO John Neuffer regarding the bicameral agreement between House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Chuck Schumer (D-N.Y.) to go to conference on the Senate-passed United States Innovation and Competition Act (USICA). The Senate-passed legislation includes $52 billion to fund the semiconductor manufacturing, research, and design provisions in the CHIPS for America Act.
SIA also supports a semiconductor investment tax credit, as called for by the FABS Act, to complement the manufacturing incentives and research investments in the CHIPS Act. Congress is considering separate legislation containing a modified version of the FABS Act to provide an investment tax credit to incentivize semiconductor manufacturing in the United States.
“Semiconductors make possible the technologies that drive our economy, national security, and innovation leadership. We are hopeful today’s agreement between leaders in the House and Senate paves the way for swift approval of competitiveness legislation that contains $52 billion to fund the CHIPS Act. We appreciate the leadership of Speaker Pelosi and Majority Leader Schumer in advancing this legislation, and we look forward to working Congress and the Administration to get it across the finish line so more of the chips America needs are researched, designed, and manufactured on U.S. shores.”
The share of global semiconductor manufacturing capacity in the U.S. has decreased from 37% in 1990 to 12% today, according to a report by SIA and the Boston Consulting Group (BCG). This decline is largely due to substantial subsidies offered by the governments of our global competitors, placing the U.S. at a competitive disadvantage in attracting new construction of semiconductor manufacturing facilities, or “fabs.” Additionally, federal investment in semiconductor research has been flat as a share of GDP, while other governments have invested substantially in research initiatives to strengthen their own semiconductor capabilities, and existing U.S. tax incentives for R&D lag behind those of other countries. Furthermore, global semiconductor supply chain vulnerabilities have emerged in recent years that must be addressed through government investments in chip manufacturing and research, according to a separate SIA-BCG study.
Recognizing the critical role semiconductors play in America’s future, Congress in January enacted the CHIPS for America Act as part of the FY 2021 National Defense Authorization Act (NDAA). The law authorized incentives for domestic semiconductor manufacturing and investments in chip research, but funding must be provided to make these provisions a reality. Funding the CHIPS Act, along with enactment of a strengthened FABS Act, are complementary efforts and will help enhance the global competitiveness of the U.S. semiconductor industry.